How much tax do you have to pay on alimony after divorce? Know 5 important rules that every divorcee should know
Alimony or alimony is an important legal provision that provides financial support to a spouse after divorce. It is a financial aid that helps the former spouse to organize their life.
Types of Alimony
| Type | Description |
|---|---|
| Lump Sum Alimony | lump sum payment |
| Monthly Payment | Payment on regular monthly basis |
Table of Contents
Tax Rules on Alimony
Lump Sum Alimony :
- Lump sum amount is considered as capital receipt
- Usually it is not taxed
Monthly Alimony :
- Can be treated as regular income
- may be taxable
Criteria for determining alimony amount
The court takes into account the following:
- husband’s salary
- husband’s property
- Children’s education
- Family Expenses
- custody of children
Special circumstances
In certain cases a wife can also pay alimony to the husband, specifically when:
- Husband’s income is low
- Husband is unemployed
- wife’s income is higher
legal basis
Alimony is determined under the Hindu Marriage Act, 1955 and other relevant laws.
Important Precautions
- The alimony amount depends on the financial situation of both the parties
- The final decision is taken by the court
- Tax rules may change from time to time
Note : It is best to consult a tax expert for specific tax-related guidance.
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